Hollande out. Current French President Francois Hollande has declared himself out of the race for the 2017 presidential election, saying that he will forgo his own personal ambition and warned against the danger of extremist movements and protectionism. Hollande has said his decision was due to the fact he wanted to put France first. Hollande did not name his successor but his withdrawal leaves a clear path for the second in command Manuel Valls, who has much better public opinion polls. Hollande successor will still face a difficult challenge in the presidential race facing off against Francois Fillon and the anti-European Marine Le Pen.
Profit taking on oil. The news of the OPEC deal has started to settle into markets now and both UK and US oil have retreated off their highs hit yesterday afternoon. Profit taking has been seen early this morning as traders take some money off the table as UK oil hit a 16 month high. Scepticism still persists over the deal as analysts say that on the face of it the deal looks good however the major participants now need to stick to their pledges, which has historically been an issue. Future forecasts are currently sitting around $50-$55 a barrel and it seem markets are still optimistic about the deal.
Nonfarm payrolls expected strong. Nonfarm payrolls out, later today, are expected to cement expectations of a December rate hike. The figure is expected at 180k up from a previous reading of 161k and average hourly earnings are expected to dip a touch to +0.3% but any weakness from either figure could pare expectations back of a rate hike. The futures market currently price in a 100% chance of a rate hike. Unemployment is set to remain at +4.9%
Sterling climbs to a 3 month high. EURGBP rallied to a three year high after the Brexit secretary David Davis said the UK “would consider” paying for access to the single market after it left the EU. The approach would be similar to that of Norway whereby the country pays €869bln a year to trade in the market with projected costs for the UK at €5bln a year. Chancellor Philip Hammond supported Davis’ comments calling them “absolutely right” and that concessions would need to be made. Later in the day, talking in front of the CBI in Wales, Davis urged businesses to keep “cool heads” as markets see a period of uncertainty ahead over the outcome of the Brexit negotiations.
FX Commentary.


EUR/USD crept higher in the trading session as the market witnessed a slew of mixed economic data from both the European and US side. Europe saw German manufacturing PMI miss by a narrow margin, while the Eurozone unemployment rate and Italian GDP both came in stronger than expected. The US showed a similar mixed signal.
ISM manufacturing index surprised the market by coming in at 53.2, exceeding expectations of 52.5. The rise in the index showed the improvement of the US manufacturing sector over the months. However, weekly jobless claims ending November 26 was a slight disappointment as it missed expectations by adding 17,000 claims to 268,000. Even though data was not promising, the market is still certain that US labour conditions still fulfil the threshold for a rate hike. 
The data appears to mean very little at this time. Unless important numbers come in extremely negative, it appears that the market has its mind set on a December rate hike. The USD for now seems to be moving within a range until something of note changes, with a possibly catalyst coming from President elect Trump. The USD has moved higher largely on perception of his policies, and should his credibility unravel, so would current USD strength.
It might be wise to lighten some positions going into today’s nonfarm payrolls; there is the possibility of a move higher given the technical break above the 1.0650 resistance.
Support: 1.0575-1.0525, 1.0462, 1.0395, 1.0240

Resistance: 1.0805, 1.0930
GBP/USD shrugged off the miss in UK Manufacturing PMI, and the rally quickly took off after prices managed to hold above the 1.2500 resistance. Manufacturing PMI came in at 53.4, under expectations of 54.3.
Prices were fuelled higher as the USD sold off as it continues to trade within its established range. Resistance at 1.2656 was broken, but the pair was not able to go much higher and turned above the 1.2700 mark. There is the possibility the pair could move higher once again as long as the support at 1.25 is not broken. 
Support: 1.2500, 1.2325, 1.2250, 1.2153

Resistance: 1.2700, 1.2920